Who does not want to live in a home that they can call their own? Everyone, right? Yes, while everyone dreams of living in their own homes! But, you can’t purchase a property straight out of your savings as home’s prices have gone up!
Unless you are born with a golden spoon, you can’t fund a home purchase without availing for a Home Loan – a viable financial product to finance your home!
Even though a Home Loan is available, not all are eligible to get it. Yes, lenders have some strict Home Loan eligibility criterion that borrowers need to match to qualify for a Home Loan.
It’s because a Housing Loan involves a higher amount and a wider tenor. And a person with a bad repayment history can’t be given a loan as the chances of turning it into a bad debt are higher.
If you are looking for a House Loan and want to know ways to qualify for it, let’s provide you some easy ways to become Home Loan ready! A Home Loan eligibility calculator may also help you know if you qualify for a Housing Loan instantly or not!
1 - Your Employment Type
Your Home Loan eligibility depends on what type of employment you are in! A salaried professional’s monthly income is considered while a self-employed person should have a business vintage of five years. The higher your income is, there are more chances of becoming loan eligible and availing a lower Home Loan interest rate.
2 - Your Age
A Home Loan applicant could be between 25-58 years of age. Always know that lenders calculate your repayment capacity based on the number of earning years you have!
3 - Your Dependents
Do you have the responsibility of your wife, father, mother, and siblings on your shoulders? It may lower your repayment capacity! Yes, it may also result in availing a higher Housing Loan interest rate.
4 - Your Current Liabilities
If you already have an ongoing debt which you are repaying, your Home Loan eligibility may go down because you are already burdened with another liability.
5 - Your Credit Score
Your Credit Score easily reflects your creditworthiness and your financial health easily. A good CIBIL Score of around 700 or more can help you get a loan approval at lower rates. By repaying your existing debts on time such as loans and credit card, you can easily improve the score and be loan confident.
6 - Age of the Property
Your loan eligibility may also depend on the type and age of the property that you are willing to buy. Properties older than 15 years old or ones being auctioned by lenders may delay a loan sanctioning process.
Home Loan Documents at a Glance
Along with proving your Home Loan eligibility which you can determine by using a home eligibility calculator, you also need to furnish some documents to process it faster:
- KYC documents
- Identity proofs
- Address proofs
- Recent photographs
- Latest salary slip or Form 16
- Last six months bank statements
- Business proof of five years of business vintage for businessmen or self-employed loan applicant
The Bottom Line
Now that you are aware of the ways you can qualify for a House Loan, you can quickly assess your candidature and then proceed.
A Home Loan aspirant could also use a home eligibility calculator to quickly determine his/her eligibility free of cost and at a lender’s website.
Prepare yourself as per the expectations of your lender, prove your eligibility, grab a Home Loan and own dream home! Good luck!
Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Gurgaon, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.